looking bearish, page-92

the u.s market is sooooo farked!

Credit squeeze set to hit big US banks
Citigroup Inc, the largest US bank, may need to write down $US12 billion ($A13.73 billion) of debt and boost reserves for bad loans by $US1 billion ($A1.14 billion) as the global credit crunch deepens, a Sanford C Bernstein & Co analyst said.

Bank of America Corp and JPMorgan Chase & Co, the second- and third-largest banks, may have respective fourth-quarter write-downs of $US5.5 billion ($A6.29 billion) and $1 billion, analyst Howard Mason also wrote in a December 31 report.

"We are trimming our estimates for the fourth quarter of 2007 and 2008 to account for capital markets write-downs, loan loss reserve building, slower net interest margin re-normalisation in 2008 and reduced buyback activity," Mason wrote.

The analyst also halved his forecast for a fourth-quarter write-down at Wachovia Corp, the fourth-largest bank, to about $US1.5 billion ($A1.72 billion) from $US3 billion ($A3.43 billion).

Financial companies have already announced more than $US70 billion ($A80.07 billion) of write-downs tied to the global credit crisis.

Last week, Goldman Sachs & Co analyst William Tanona projected fourth-quarter write-downs of $US18.7 billion ($A21.39 billion) at Citigroup and $US3.4 billion ($A3.89 billion) at JPMorgan.

Mason now expects a fourth-quarter loss of 65 cents per share at Citigroup, and quarterly profit per share of 40 cents at Bank of America, $1.00 at JPMorgan and 30 cents at Wachovia.

He had previously forecast a break-even quarter for Wachovia.

The analyst rates Citigroup and Wachovia "outperform," and Bank of America and JPMorgan "market perform."

Analysts on average expect a quarterly loss per share of 61 cents at Citigroup, and profit per share of 23 cents at Bank of America, $1.01 at JPMorgan and 36 cents at Wachovia, according to Reuters Estimates.